“Surge pricing is a standard practice across different industries and it is no different with app-based transport aggregators," says Samar Singla, founder and CEO Jugnoo.ET Online | April 22, 2016, 15:10 IST

NEW DELHI: On demand auto aggregator app Jugnoo discontinued surge pricing in Delhi following orders from the government to stop its practice in the wake of the second phase of the odd-even scheme.

This comes close on the heels of announcements made by rivals Ola and Uber suspending surge pricing in the city.

“Surge pricing is a standard practice across different industries and it is no different with app-based transport aggregators," says Samar Singla, founder and CEO Jugnoo. "However, we came to this decision following the general commotion ensued by the transport aggregator ecosystem," he says.

Singla further goes on to explain that surcharging is based on the fundamental demand and supply concept of economics, where it is up to consumers whether or not they want to pay more for a service if its demand is higher.

"This also helps in prioritizing travel, which means that only people who really need the service will use it by paying a higher price and the rest will find other ways of commuting," he adds.

"Surcharge is part of any business model and permanently banning it will negatively impact these companies," says Singla. He feels that a better way to handle the situation would be to put a cap on the surge amount.

Jugnoo had recently launched a campaign in support of the government’s odd-even scheme under which it added 1000 more autos to its existing fleet.